The Anti-Poverty Platform meets with the Central Committee of Parliament today. Eradicating poverty is a practically worldwide ideal, but most countries have found there is no magic formula to achieve such.
An obvious way seems increasing the pay and thus spending power of lower income groups. However, when labour becomes more expensive, this is usually reflected in rising consumer prices that thwart any actual positive social impact.
The Curaçao Business Association VBC recently asked the responsible minister to reconsider his planned minimum wage hike per January 1. It said the other three in the past five years had not led to more prosperity, but rather inflation and a higher cost of doing business, as well as unemployment.
All this does not help persons trying to survive on a minimum wage or AOV old age pension in St. Maarten. Few will argue that doing so is a challenge with the current cost of living.
It’s claimed prices on the island are similar as those of Curaçao in Antillean guilders, except they’re in US dollars, while that’s not the case for salaries. This, despite the import duties and a six per cent OB tax over there, although people should keep in mind that the local five per cent turnover tax is cumulative.
Alternatives include expanding the so-called basket of essential goods for which government sets a maximum price. The list could possibly be updated as well, because basic needs change also due to modern health considerations.
At the same time, intervening in the market too much might have negative consequences for the free private sector competition that is supposed to keep prices reasonable in the first place. The establishment of a fair-trade authority can guard against so-called cartel forming and monopolising undermining this supply-and-demand principle.
One huge factor is the cost of housing, which is why the Ombudsman’s systemic investigation into the Rent Tribunal (see related story) remains important. The recommendations made to improve its functioning should be implemented without further ado to give both tenants and landlords at least some recourse to fight abuse.
So yes, poverty is a serious problem that must be addressed, but effectively tackling it without hurting the already vulnerable tourism economy and making things even worse is – in reality – easier said than done.
